Consolidation of Student Loans

You finally did it. Student loans and financial aid are a necessary evil for students who simply can’t afford to pay for their education expenses as they go in cash. They may or may not be from the same lender, and in many cases, are for more than one degree from different universities. It is definitely a better alternative to charging it on a credit card with outrageous interest rates. You should be thinking about consolidation of student loans. You’ve completed your education and now you have lots and lots of student loan repayment notices filling up your mailbox. However, when those interest statements and payment notices start coming, it can be a little scary. Remember the semester (or two) that you wouldn’t work as much, so you had to borrow a little extra to live on? Food is one of those necessities that you simply cannot live without, and the money has to come from somewhere. Unfortunately, not all that money was spent on necessities, which is why you’re now looking at your student loan statements in absolute denial; it was certain fun while it lasted.

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If your loans are all in the same place, then it shouldn’t be that difficult. There are also some great incentives offered, including reduction of interest rate up to 2% after twenty-four consecutive automatic withdrawal payments. Consolidation of student loans doesn’t have to be an arduous process but it can be. Consolidation of student loans is an important financial decision, just as it was when you selected a college major and applied for student financial aid.

Undoubtedly, you have also been receiving solicitations from lenders that specialize in consolidation of student loans. If they are held by more than a single lender, the borrower is then free to consolidate with any lenders that participate in the federal student loan consolidation program. But before you consolidate student loans, do your relook and choose the best option. Borrowers can only consolidate once, and there may be additional fees involved depending the lender. According to various online sources, federal law mandates that a borrower must consolidate with the lender that holds the loans if all the loans are with that lender. If you haven’t yet considered this, you should, to avoid paying any more interest than you absolutely have to. Be wary of companies that advertise ridiculously low interest rates or reduction of payment, fast approval, or other cheesy incentives. Read the alright print on all offers for consolidation of student loans.

Happy Independence Day!

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AP via Yahoo! News - Jun 30 2:49 PM Beleaguered consumer bank Wachovia Corp. said Monday it will quit offering a mortgage payment option that allows borrowers to pay less each month than the bank charges in interest.
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